Industry News

Recently, the Center for Retirement Research (CRR) at Boston College released its issue brief, How Much Do Retirees Spend on Uncertain Health Costs? CRR indicates that retirees will face uncertain out-of-pocket health costs beyond predictable insurance premiums. The analysis shows that total spending on retirees’ health care is high including long-term care and excluding premiums.

Health care insurers such as Medicare and Medicaid cover about 80% of health costs. Medicare and Medicaid help to reduce the financial risk that older Americans face with high health care expenses. However, Medicare does not cover all expenses and Medicaid only covers households with very low assets and income. Consequently, better under­standing for policymakers and retirees is a vital issue regarding the extent of this coverage and the remain­ing financial burden on individuals.

According to CRR, on average, 65-year-old households are estimated to pay about $67,000 for out-of-pocket health costs over their remaining lifetime.

The brief is available here.